A new white paper from the warehouse developer ProLogis studies how obsolescence impacts the commercial logistics real estate sector. The paper found that only around 20 percent of logistics real estate in the United States can be considered “institutional grade” – that is, properties that are neither obsolete nor too far removed from population centers or critical transport infrastructure. The amount of institutional grade space amounts to roughly 4 billion square feet. ...

Ocean carrier Orient Overseas Container Line will commence a new weekly service between ports in China and Ho Chi Minh, Singapore, Jakarta and Laem Chabang called the Central PRC/Southeast Asia Service (CSS). OOCL will operate the CSS with four vessels, with the first sailing from Ningbo April 5. The full port rotation of the service will be Ningbo, Shanghai, Xiamen, Ho Chi Minh, Singapore, Jakarta, Singapore, Laem Chabang, Ho Chi Minh, and back to Ningbo. NYK Line...

The electric utility American Electric Power (AEP) said Monday it is exploring “strategic options” for its inland barge subsidiary. The unit, AEP River Operations LLC, is one of the largest U.S. inland marine transportation companies, transporting coal and other dry and liquid bulk commodities, primarily on the Ohio and Illinois Rivers and the lower portion of the Mississippi River. A spokesman for AEP said the two primary options are to either sell the business or ...

Strategic View with Walter Kemmsies Containerized exports did not perform well in 2014, according to data from ports that reported volumes for loaded and empty containers. This is not surprising given that the U.S. dollar appreciated significantly in the latter half of 2014, major trading partners’ economies slowed appreciably and potentially a shortage of containers in less populated areas that are the source for a significant share of U.S. exports. ...

Automation, I’ve been led to believe from discussions with several management sources, was not a big issue in the contract talks between the International Longshore and Warehouse Union and Pacific Maritime Association during the past year. They tell me they feel confident about their ability to automate container terminals because of language agreed to in their 2002 and 2008 contracts with the ILWU. Still, it will be interesting to see if all goes smoothly as West Coast terminal...

Economists and international development agencies are bullish on international trade, with forecasts that cross-border exchange of goods will continue to expand at historic rates. But infrastructure and logistics impediments could slow the rate of trade growth, cautioned Walter Kemmsies, the chief economist at marine and freight engineering firm Moffat & Nichol. At a certain point, he said, the increased cost of importing and exporting due to congestion could discourage ship...

Speaking at the California Maritime Leadership Forum earlier this year, Jock O’Connell, an international trade advisor at Beacon Economics, told his audience that the container shipping industry reminded him of “the old movies that some of us grew up with during the 1950s and the post-atomic scares and creatures that existed out in the Pacific. There are monsters out there.” While a step down from the containerships on Far East-to-North Europe routes, BlueWater Reporting says th...

Recent collective bargaining between West Coast dockworkers and waterfront employers for a new contract revolved around issues such as wages, health benefits, pensions and retaining jurisdiction over chassis maintenance, but many maritime industry professionals suspect another unspoken sticking point has been the degree to which container terminals automate cranes, entry and exit gates, cargo-handling equipment and other functions. In the previous contract that expired last June...

Labor peace may finally be returning to the West Coast ports, but the cargo delays that occurred because of low productivity were not theoretical. Importers and exporters were hit in their bottom line, and companies lost revenue and incurred extra expenses. Agricultural exporters in particular worry about lost opportunity costs if they can't win back frustrated overseas customers. Retailers likely will swallow the extra costs rather than passing them onto consumers, which will compress their...

According to a new report from the FreightWatch International Supply Chain Intelligence Center, 794 cargo thefts occurred in the United States during 2014, 12 percent fewer than 2013. The 12 percent decrease in thefts was offset, however, by a 36 percent increase in the average value of cargo thefts. Average value for cargo thefts was $232,924 in 2014. The logistics security service provider said of its 2014 United States Annual Cargo Theft Report, “Cargo criminals ...

The transportation consultancy firm Seabury estimates that annual global ocean freight growth will be 5.3 percent between 2015 and 2018, according to forecasts based on the company’s ocean trade database. Labeling the growth “moderate,” Seabury said that growth still lags well behind annual growth rates for container trade in 2000-2004 (11 percent) and 2004-2008 (8 percent) periods, but well above the "stagnant" growth from 2008-2013 (3.1 percent). Seabury noted tha...

The labor slowdown at West Coast ports during contract negotiations likely sliced a full percentage point off of fourth quarter Gross Domestic Product, Deutsche Bank Chief Economist Joseph LaVorgna said. The U.S. economy grew at a 2.6 percent annualized pace in the last three months of the year, according to a preliminary government estimate. In the third quarter, GDP raced forward at 5 percent. LaVorgna based his conclusion on the assumption that without a slowdown...

The westbound transatlantic trade grew 8.4 percent in 2014, with volumes in the fourth quarter 12.6 percent higher than in the same 2013 period, London-based Drewry said. In the latest issue of its Container Insight Weekly , Drewry said, “The late surge was given a shove from the dollar’s strengthening against the euro. Over the course of 2014, the two currencies’ average exchange rate was virtually unchanged, but the euro did fall by around 6 percent against the dollar in the f...

On Second Thought with Andrea Appell “We are going global!” Four familiar words proclaimed by many U.S. companies, large and small. For a company and its employees, these words are thrilling, energizing, and motivating. But what does this actually mean to each function of a company? How does the movement to “go global” impact you? How can you get it right? Sales or product development professionals may interpret this call to arms as developing new products and laun...

Strategic View with Walter Kemmsies It is difficult to predict tipping points, the combinations of events and trends that result in a large break from the past. They usually become evident after the fact. It is possible that congestion in port gateway regions in many parts of the world is more of an indication that a milestone has been reached in global freight movement, and not simply the result of a few short-term issues that can be corrected by a few targeted investments. If so, then not...

In Ben Meyer’s Container Analytics column, “Skipped sailings still on the rise,” in the February issue, he has hit on an important topic. He discussed it with regards to overcapacity and carrier attempts to adjust it. However, there is another take on blank sailings—slow steaming, schedule revisions, alliance changes, alliance operations, and other actions. It goes beyond the transpacific and occurs throughout all the trade lanes. Also, skipped sailings as a global ...

As most offices are shutting down for the evening, activity at the headquarters of Info-X Software Technology is reaching a crescendo. Set amidst a bustling industrial office section of Gurgaon (a suburb of New Delhi, India) Info-X’s offices glow with light as night sets in. That’s because the bulk of Info-X’s work is handling the IT and back office needs of freight forwarders and non-vessel-operating common carriers in Europe and North America. Info-X, like a handf...

The Singapore-based parent company of liner carrier APL has sold off the carrier’s sister company APL Logistics to Japan’s Kintetsu World Express for $1.2 billion, the Tokyo-based company said Tuesday. The price is considered higher than most analysts expected APL Logistics parent NOL to fetch. NOL said in August it was exploring a sale or initial public offering of its logistics business . Initial reports suggested NOL was seeking around $750 million for the business. &n...

Liner service reliability fell to a record low in January as the effects of U.S. West Coast congestion and the phasing-in of new alliance services took their toll, according to the Carrier Performance Insight , published monthly by global shipping consultancy Drewry. Overall on-time performance for the three key east-west trades slumped to 48.6 percent in January, down 9.4 percent from December, which itself was one of the worst months of 2014. Drewry called the performance leve...

A chart in Friday's AS Daily showing a consensus "forecast of forecasts" for economic growth in the Americas included a keying error showing projected U.S. GDP in 2015 at 2.0. The real estimate is for 3.3 percent growth.

February is always a crucial month for transpacific shippers, coming as it does near the beginning of ocean carrier service contract negotiating season. This year, the stakes have been raised with systemic operational issues and the threat of work stoppages at U.S. container ports, which makes picking the right carriers, and choosing the right allocations for each of those carriers, all the more vital for shippers. One element of those carrier selection and allocati...

Strategic View with Walter Kemmsies It won’t take much trade growth in future years to exacerbate congestion at U.S. seaport gateway areas unless significant investments in freight movement capacity take place. U.S. GDP is estimated to have grown 2.5 percent in 2014 with a much higher rate of growth in the second half (severe weather in the first quarter negatively impacted activity), while containerized imports appear to have grown 6.2 percent (based on data available th...

You might recall American Shipper put out a series of reports five or so years ago with transportation analyst Merge Global on the future of logistics and various transportation markets. As is the case with such consultancies, Merge Global has become Logistics Capital & Strategy, though stalwarts like Brian Clancy (a co-founder of Merge Global who often wrote in American Shipper ) remain, as does industry vet Ted Prince, most recently with Kansas City Southern. ...

As the founding partner of management consulting firm Summit Strategic Partners and a former port director, Stanley Payne sees interesting similarities between start-up companies he assists and port authorities. For one, ports and startups always seem to be looking for money. Then they price their product unrealistically low to gain market penetration. But after years of higher and higher sales and volumes, both face the harsh reality of profit expectations, Payne s...

Orders for truck trailers reached 45,500 in December, the second highest month ever recorded, according to the freight analyst FTR Associates. The number of orders was 1.5 percent below October 2014, the highest month on record. Trailer orders for 2014 totaled more than 360,000, by far the best order year ever, FTR said. “Dry van orders set an all-time record, as original equipment manufacturers aggressively sought orders to book into the third and fourth quarters,”...

Erwin Saddle Creek Logistics Services, Lakeland, Fla., has promoted John Erwin to vice president for Saddle Creek Transportation. The new position was created in response to the rapid growth of the transportation division. Erwin joined Saddle Creek in 2011 as director of operations support and maintenance. He has overseen the development of the company’s compressed natural gas fleet and a doubling of overall fleet size. SMC3 has picked Andrew Slusher to become its next pre...

The turn of a new year is always rife with recaps and predictions, and this end of December is no different. One interesting place to turn for some tea leaf reading is a new website assembled by Deloitte on the future of transportation . The site mostly focuses on what the consulting firm sees happening in the passenger transportation realm – everything from self-service airports to drivers tied together in a veritable “internet of cars.” But the predictions invaria...

On Second Thought with John Tabor Supply chain risk has become a hot topic lately with concerns about rising transportation costs, regulations, and capacity issues. As I write this column in early December the Los Angeles-Long Beach port disruption has already dramatically affected this year’s holiday selling season. Tens of thousands of containers sit idle on ships, in ports or transportation providers’ yards loaded with inventory that was supposed to already be on store shelves. &n...

In March 2006, I remember attending an event in Oakland about trade with China and hearing a dynamic speaker talk about trade compliance. Not knowing anything about trade compliance at that point, the speaker sounded thoroughly impressive. Nearly 10 years later, every time I hear Beth Peterson speak, whether it’s at a conference, or on one of the many webinars she does with us, she sounds just as impressive. Peterson celebrated the 10-year anniversary of her global ...

Just before Thanksgiving I spoke with Andrew Kinsey, a senior marine risk consultant for Allianz Global Corporate & Specialty, who addressed a variety of issues on his radar screen. A retired master for both Maersk Line, Ltd. and the U.S. Military Sealift Command, he was returning from Alabama where he had done a loss control survey of the primary container terminal in Mobile, operated by APM Terminals. He believes Mobile, like Houston, is well positioned to ben...

I was pretty caught by surprise when I read that Thomson Reuters and KPMG had inked a partnership in early 2014 to offer global trade management software and services in the South America market. To my mind, the number of providers of such software and services could fit in a pretty tight circle, but clearly, that circle needs to be expanded. That Thomson Reuters—known in the mainstream as much for publishing as for providing trade compliance and free trade agreemen...

There’s a sense among many transportation executives that freight payment is a different kettle of fish than other types of accounts payable. A sense that paying carriers and logistics companies carries with it more nuance than paying other vendors. However, Adam Hall, senior director of international logistics for the national retailer Dollar General, isn’t buying it. “People have looked at freight payment as unique, but I don’t think it’s that unique,...

Drewry says strong cargo volumes from Asia to North America's west coast have "exposed severe shortcomings in the overall supply chain network." "Current slack season volumes will give some respite to the USWC (U.S. West Coast) port congestion but fundamental issues need to be addressed by the industry’s stakeholders if this not to be a recurring theme," the London-based consultants wrote in the current issue of their Container Insight Weekly . Drewry said vol...

Congestion in the ports of Los Angeles and Long Beach has hit carrier schedule reliability hard, according to research from the maritime analyst SeaIntel. Schedule reliability industry-wide fell 40 percent into the two Southern California ports in October, and 50 percent into the next port of call, according to SeaIntel’s Sunday Spotlight . The ports have been plagued by a mixture of operational issues tied to chassis availability and the impact of larger vessels di...

Maersk Line and Hamburg Süd had the highest schedule reliability among container shipping lines in October, according to performance rankings published by the shipping consultancy Drewry. The rankings are a part of Drewry’s new online version of its Carrier Performance Insight report, developed in conjunction with the shipment management software provider CargoSmart. Drewry found that Maersk Line and Hamburg Süd were “by far the most reliable carriers” in the t...

Strategic View with Walter Kemmsies At the time this column is being written, the data indicates the global economy and international trade are likely to continue growing in a sustainable way in 2015, supported by the ongoing U.S. recovery. The not-so-good news is that congestion issues faced by the freight movement industry in the United States and in many other parts of the world could continue. Hopefully, actions being taken now will provide some relief. Insufficient policy support for i...

In February and April 2011 Kentucky Fuel Corp. entered into contracts with Celtic Marine for the transport of coal by barge from terminals in Kentucky and West Virginia to New Orleans and Darrow, La. James C. Justice Cos. guaranteed obligations KFC owed to Celtic Marine. There were agreements for additional freight and stevedoring, if minimum quantities were not shipped. On Dec. 7, 2011, Celtic filed suit against Justice for breach of the guarantor’s agreements, all...

Drewry is predicting a recovery of the container shipping industry in two years, possibly by late 2016 or 2017. When it comes, the London-based consultant said the turnaround will be based on the “formation of the new mega alliances and the continued reduction of unit costs, rather than the matching of supply and demand at the individual trade route level” and improved freight rates. Neil Dekker, Drewry’s director of container research, said “the possibility of mat...

As summer turned to fall, the International Air Transport Association had some good news. International air cargo volume was up consecutively for July and August, and outperforming 2013’s numbers throughout the year. There was a caveat — demand has increased slower than global economic activity. This wasn’t pre-recession growth for air cargo, but the sustained uptick in worldwide freight tonnage showed a vast improvement over recent years when air freight had been sluggish...

On Second Thought with Beth Peterson Many new startups are innovating products that include encryption—which is always subject to export controls. Because they aren’t familiar with export regulations, companies inadvertently violate them when building new products; they don’t know that all technology products require an export control classification number (ECCN) and possibly an export license. U.S. export regulations can apply domestically and follow U.S. origin goods as they ship around t...

Contemporary anecdotal evidence suggests, and recent empirical substantiation supports, the phenomenon that shippers are continually misusing Incoterms. This practice continues among the world’s shippers despite the International Chamber of Commerce’s insistence that certain terms are solely intended for maritime or intermodal containerized freight. But the fault may not lie solely on the buyers and sellers or their designated freight forwarders. International banking institutions often fail...

Who is the supply chain professional who recently became the highest-earning woman in Jeopardy’s history? Julia Collins. The 31-year-old from Wilmette, Ill., obtained her master’s degree from MIT’s Supply Chain Management Program in 2010. She received a double-bachelor’s degree in art history and history at Wellesley College. She won more than $428,000 in 20 consecutive games on the game show earlier this year. Published reports said ...

The intermodal industry has been on a roll since the financial crisis, with total volumes climbing every year since 2009. This year that growth has continued. The Intermodal Association of America said the industry handled 7.95 million containers in the first half of 2014, both domestic and international as well as trailers, up about 5.5 percent from around 7.54 million in the first half of 2013. Speaking at IANA’s Intermodal Expo in September, Noel Perry, managing ...

Amazon and DHL are talking about using drones to deliver packages by air; Google and Tesla about driverless cars. Some futurists are even hinting at crew-less ships. Rolls Royce got a lot of publicity earlier this year when Oskar Levander, vice president of innovation, engineering and technology, ruminated about drone ships in an article posted on the engine maker’s website that also discussed alternative fuels and propulsion systems. “A growing number ...

Strategic View with Walter Kemmsies Economic recovery has put the spotlight on the inadequacies of freight movement infrastructure, prompting significant efforts, both rhetorical and substantive, to boost supply chain capacity. It is also instigating a lot of debate about planning for the future, given major trends and events such as the growing size of container vessels, expansion of the Panama and Suez canals, growing crude-by-rail volumes, regulation of truck drivers’ hours of service, r...

Executive IT Corner with Biju Kewalram We appear to be progressing inexorably towards a world where everything (and every person) is connected to the Internet. A world where every physical object we own and use communicates with everything else, shares information and is controlled over a network. Trend watchers and forecasters have been predicting such a world since the days the Internet itself became a household word. Recently, the concept of the Internet of Thin...

Industry analyst FTR has released preliminary data showing Class 8 truck orders in North America for August were up 29 percent year over year at 24,947 units. Class 8 orders have now had 19 consecutive months with year-over-year increases, FTR noted. August orders, while were helped by summer dealer incentive programs, were the strongest for the month since 2005. Class 8 orders for the latest six-month period through August reached 316,000 units, FTR said. “The str...

The U.S. International Trade Commission, which is in charge of maintaining and updating the country’s Harmonized Tariff Schedule, has started an investigation that will lead to recommendations to the White House on necessary modifications to the product category system. International customs officials at the World Customs Organization in Brussels have recently agreed on 234 changes to the global system that categorizes products that are imported and exported around the wo...

Strategic View with Walter Kemmsies A few years ago the Organization for Economic Cooperation and Development (OECD) estimated the size of the world’s middle class and forecast how it would grow. (The OECD’s middle class forecast, along with the U.S. Census Bureau’s world population estimates, is shown in the corresponding chart.) According to the OECD study, published in 2010, the global middle class should be 75 percent larger in 2020 compared to 2010 and by 2030 164 percent larger. ...

Last year, I retired and I’m about to retire again, and this time from writing for American Shipper . I’ve been writing a regular column for the publication for a couple of years and thoroughly enjoyed the experience. But it’s time to pass the pen to someone more active in the field. It’s too bad that more people in our industry don’t write. I did it, because it was fun and interesting and for the responses that came to me from American Shipper readers. Besides, it looks pretty ...

CSCMP, universities work with companies to prepare graduates for growing field. As the field of supply chain management becomes ever more important as a competitive differentiator among the world’s leading companies, so does the necessity to attract the brightest, most capable talent in the field. The problem is the supply of talent is not sufficiently keeping up with demand, according to recent studies conducted by the Council of Supply Chain Management Professionals in partne...

Executive IT Corner with Biju Kewalram I saw my first “3D Printer” in action nearly 12 years ago. The basics of the technology (called additive manufacturing) have been around since the 1980s. I watched with fascination as a printer-like device, (albeit a very large printer), attached to a computer, slowly used a plastic raw material to construct a small model of a famous building. The degree of detail in the finished object, complete with all the architectural aspects of the o...

The First Sale rule has never been popular with U.S. Customs and Border Protection and is under assault again. In July, the agency proposed amendments to its internal compliance publication, which guides enforcement personnel on how to do their jobs, essentially forcing importers to keep extra documentation to verify their claim of first sale privileges and substantially increasing their record-keeping burden. The rule allows a company to base the value of an import...

McKinsey says governments can generate $1.4 trillion benefit through more efficient project delivery. Experts at management consulting firm McKinsey & Co. say there are smart ways for governments, in the United States and around the world, to stretch their transportation dollars and better leverage private investments to close the gap in infrastructure supply. A study last year by researchers at the McKinsey Global Institute argues that nations generally can obtain the same...

Port investment brightens, but outlook remains cloudy for toll roads, airports and other public assets. Businesses, economists, and policy experts say there is a crying need for government to invest in infrastructure because it is a foundation for economic growth and makes U.S. exporters more competitive in global markets. Meanwhile, federal, state and local governments are severely constrained from closing the infrastructure investment gap by limited funds and anti-tax public sentiment. &n...

Strategic View with Walter Kemmsies It has been five years since the 2007-2009 recession ended, but only in the last few months have aggregate macroeconomic and freight movement industry data series indicated that activity has generally returned to pre-recession levels. As capacity utilization rises, negotiating power should shift from buyers, as has been the case in the last seven years, to sellers. Buyers may end up disappointed as sellers renege on deals they agreed to when their competi...

Executive IT Corner with Biju Kewalram You can’t avoid factoring in the “cloud” in any current discussion about software or system acquisition. Cloud-based capability now appears on most lists of selection criteria and technology requests for quotations for software. But what is the “cloud” and what does it mean to logistics companies making systems investment decisions? The key thing to note is the cloud is ultimately about infrastructure and the underlying technology on which...

Container carriers experience another difficult year with soft demand, excess capacity. 2013 was another tough year for the liner shipping industry, with the container operations of 15 public companies examined by American Shipper losing an aggregate $530 million. While some companies—most notably, the world’s largest container carrier Maersk Line, with an operating profit of $1.6 billion—did well, it seems likely that many carriers will have difficulty sailing out of their sea...

Global trade compliance doesn’t evolve as noticeably or quickly as fashion changes with the seasons. However, the fashion brand Gitano was forever transformed almost overnight by the powerful effect of enforced trade compliance. Gitano, a designer of jeans had been a thriving apparel manufacturer until the company’s executives pleaded guilty to charges of evading import duties on their merchandise in December 1993. After an ensuing multimillion-dollar penalty case and loss of th...